Dennig v. Swift & Co.

• Citation: 98 S.W.2d 659,339 Mo. 604
• Parties: Louis E. Dennig, Alex Bischoff, Walter W. Krenning, Louis S. Dennig, Henry Bischoff, Jr., Harry S. Bischoff, Harry C. Henger, Andrew J. Haverstick and Edward G. Bischoff, as the President and Last Board of Directors of St. Louis Independent Liquidating Company, a Dissolved Corporation, Appellants, v. Swift & Company, a Corporation, St. Louis Independent Packing Company, a Corporation, Missouri Butterine Company, a Corporation, and Waldeck Packing Company, a Corporation
• Decision Date: 12 November 1936
• Court: Missouri Supreme Court

98 S.W.2d 659

339 Mo. 604

Louis E. Dennig, Alex Bischoff, Walter W. Krenning, Louis S. Dennig, Henry Bischoff, Jr., Harry S. Bischoff, Harry C. Henger, Andrew J. Haverstick and Edward G. Bischoff, as the President and Last Board of Directors of St. Louis Independent Liquidating Company, a Dissolved Corporation, Appellants, v. Swift & Company, a Corporation, St. Louis Independent Packing Company, a Corporation, Missouri Butterine Company, a Corporation, and Waldeck Packing Company, a Corporation

Supreme Court of Missouri

November 12, 1936

Appeal from Circuit Court of City of St. Louis; Hon. James F Green, Judge.

Reversed and remanded (with directions).

Gustave A. Stamm and Maurice L. Stewart for appellants.

(1) The tax assessment made as of June 1st forms the basis for the taxes for "the next year, or the year beginning with January 1st." State ex rel. Flaugh v. Jaudon, 286 Mo 193, 227 S.W. 50; State ex rel. Circuit Attorney v Macklin, 41 Mo.App. 342. (2) The words "year 1931" mean calendar year 1931. R. S. 1929, secs. 655, 11398; Wilson v. Knox County, 132 Mo. 400; State ex rel. Vaughn v. Appleby, 136 Mo. 414, 37 S.W. 1122; State ex rel. v. Allison, 155 Mo. 331, 56 S.W. 467; Union Trust & Savings Bank v. Sedalia, 300 Mo. 417, 254 S.W. 28; State ex rel. Circuit Attorney v. Macklin, 41 Mo.App. 342; Sedalia v. Chalford, 4 F.2d 350. (3) The State fiscal year in Missouri is coincident with the calendar year. R. S. 1929, sec. 11398; Wilson v. Knox County, 132 Mo. 400; State ex rel. Vaughn v. Appleby, 136 Mo. 414, 37 S.W. 1122; State ex rel. v. Allison, 155 Mo. 331, 56 S.W. 467; Union Trust & Savings Bank v. Sedalia, 300 Mo. 417, 254 S.W. 28. (4) The phrase taxes "for the year" is of common use and general acceptance in Missouri. State ex rel. v. Carr, 178 Mo. 230, 77 S.W. 543; State ex rel. Hawken v. Edwards, 315 Mo. 212, 286 S.W. 25; Laws 1933, Ex. Sess., p. 166; Laws 1933, p. 451, sec. 9975C; Laws 1933, p. 452, sec. 9975B; Laws 1933, p. 453, sec. 9975A. (5) The phrase "general taxes payable for the year 1931 for the real and personal property to be purchased hereunder shall be prorated between the parties hereto as of the date of delivery of the deeds" means that the taxes payable in December, 1931, should be prorated between the buyer and seller according to the number of months in 1931 each had title to the property. Thompson v. Crains, 294 Ill. 270, 128 N.E. 508, 12 A. L. R. 931; Platt v. Flower, 66 Misc. 342, 123 N.Y.S. 536; Pere Marquette Railroad Co. v. Railroad Co., 158 Mich. 40, 122 N.W. 356; Empire Petroleum Co. v. So. Pipe Line Co., 294 S.W. 5.

R. E. Fisher and Fordyce, White, Mayne & Williams for respondents.

(1) Taxes are assessed as of June 1st for a fiscal or tax year beginning on that date and ending on June 1st of the following year. R. S. Mo. 1929, secs. 9746, 9779, 9780; 12 Mo. Stat. Ann., pp. 7867, 7888; McLaren v. Sheble, 45 Mo. 130; Glasgow v. Rosse, 43 Mo. 479; Blossom v. Van Court, 34 Mo. 390; De Giverville v. Legg, 48 Mo.App. 573; McManus v. Fair Shoe & Clothing Co., 60 Mo.App. 216; Hammett & Co. v. Peats Co., 217 Mass. 520, 105 N.E. 370; Welch v. Gordon, 284 Mass. 485, 188 N.E. 239. (2) The contract provision "taxes payable for the year 1931" refers to the calendar year, and includes taxes payable for five months of the fiscal year from June 1, 1930, to June 1, 1931, as well as the first seven months of the following fiscal year. Authorities under point 1. (3) The court properly excluded the testimony offered for the purpose of showing a local custom with reference to the prorating of taxes because (a) The contract was plain and unambiguous in its terms, and parol evidence was not admissible to alter, vary or add to it. Elliott v. Winn, 305 Mo. 105, 264 S.W. 391; Kimbrough v. Brawner, 47 Mo. 398; State ex rel. C. M. St. P. & Pac. Railroad v. Pub. Serv. Comm., 189 S.W. 77, 269 Mo. 63; Kemper Mill Elevator v. Hines, 239 S.W. 803, 239 Mo. 88; 2 Statement of Law Contracts, p. 349. (b) The language of the contract expressly covered the proration of taxes and thereby impliedly excluded any testimony with reference to a custom alleged to prevail in connection with the subject matter of the specific agreement. 17 C. J. 510; Kemper Mill & Elevator Co. v. Hines, supra; Authorities under 3a.

OPINION

Collet, J.

On July 31, 1931, a written contract was executed between the St. Louis Independent Packing Company and Swift & Company providing for the sale of certain real and personal property by the St. Louis Independent Packing Company to Swift & Company. Certain arrangements were made subsequent to the execution of this contract involving the creation of other corporate entities to facilitate the transfer of the properties involved in the sale. Since those arrangements have no bearing on this controversy we will treat the transaction as one between the St. Louis Independent Packing Company and Swift & Company. The former will be referred to as the packing company.

The contract contained the following provision:

"Seller shall furnish to Buyer . . . certificates of title . . . to all of the real property situated in the City of St. Louis, Missouri, showing good and merchantable fee simple title thereto of record in Seller on the latest possible date prior to the date of said certificates . . . free from all liens and encumbrances excepting . . . general taxes payable for the year 1931 and thereafter. Said general taxes payable for the year 1931 for the real and personal property to be purchased hereunder shall be prorated between the parties hereto as of the date of delivery of the deeds and other instruments as hereinafter specified." (Italics ours.)

The deeds referred to in the contract were dated August 18, 1931. (The date of the deed was assumed in the calculations of the parties to be August 15, 1931.) Swift & Company went into possession of the property August 15, 1931, and paid the agreed purchase price less $ 27,960.36 representing the amount of taxes which Swift & Company contended the packing company was liable for under the provision of the contract set out above. The amount withheld consists of all the taxes payable (and later paid) in December, 1931, amounting to $ 23,082.07 on real estate and $ 57.72 personal property, and also $ 4819.94 representing the taxes for two and one-half months from June 1, 1931, to August 15, 1931.

The packing company contended that the contract, properly construed, required it to pay seven and one-half twelfths of the taxes, assessed June 1, 1930, and payable in the calendar year 1931, and the purchaser four and one-half twelfths of those taxes.

The application of the packing company's theory would result in its liability for taxes being limited to $ 14,484.41 instead of $ 27,960.36 as claimed by Swift & Company. The payment of the difference of $ 13,475.95 being refused, the packing company brought this action for its recovery. A jury was waived and the cause tried before the court. At the trial the deed referred to in the contract was admitted in evidence. The deed contained a provision relating to taxes substantially similar to the terms of the contract. There is no contention that the deed modified or changed the contract or that it should be controlling.

During the progress of the trial plaintiff offered evidence showing that the custom in St. Louis was to divide the taxes payable in the year of sale between the vendor and vendee in proportion to the extent of the portion of the year each owned the property. The court admitted this evidence subject to objection, indicating however that it would be excluded later. No further ruling relative to it appears. The defendant Swift & Company sought to prove that the question of what taxes were to be paid by each of the parties was discussed by representatives of the parties in the negotiations immediately preceding and incident to the drafting and execution of the contract, that "the custom of prorating taxes on the calendar year" was brought up by plaintiff's counsel who offered a "rider" to the proposed draft of the contract changing the words "taxes payable for the year 1931" to read "taxes payable in the year 1931," but that the rider was rejected by defendant. This evidence was excluded, offer of proof was made and refused by the court. At the conclusion of the evidence the court gave defendant's declaration of law in the nature of a demurrer and entered judgment for defendant. From that judgment plaintiff appeals.

The defendant, respondent here, states its position as follows:

"Respondents contend and believe that the words 'the year 1931,' which appear in the contract, have reference to the calendar year 1931. Respondents do not contend, and have never contended (as the appellants mistakenly assert), that this language has reference to the 'fiscal year 1931,' but, on the contrary, respondents contend that there is independent of the contract, a fiscal year for purposes of property taxation from June 1, 1930, to June 1, 1931, and also a fiscal year from June 1, 1931, to June 1, 1932. The taxes payable for the fiscal year June 1, 1930, to June 1, 1931, are payable in December, 1931, but although payable in 1931, these taxes are not the entire 'taxes for the calendar year 1931.' The taxes payable for the calendar year 1931 are the taxes for the last portion of the fiscal year ending June 1, 1931, and the first seven months of the following fiscal year.

"The year 1931 covered a portion of two tax periods. The seller by the terms of the contract, agreed to pay the taxes which were actually payable under the law for the period during which the seller held the property, and, since the seller held the property up to August 15, 1931 (and, therefore, held the property for the entire period of the fiscal year...